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Market-Based Lobbying: Evidence from Advertising Spending in Italy

Listed author(s):
  • Stefano DellaVigna
  • Ruben Durante
  • Brian Knight
  • Eliana La Ferrara

We analyze a novel lobbying channel: firms shifting spending toward a politician's business in the hope of securing favorable regulation. We examine the evolution of advertising spending in Italy during 1993-2009, a period in which Berlusconi was in power three separate times, while maintaining control of Italy's major private television network, Mediaset. We document a significant pro-Mediaset bias in the allocation of advertising during Berlusconi's political tenure, especially for companies in more regulated sectors. We estimate that Mediaset profits increased by one billion euros during this period and that regulated firms anticipated sizeable returns, stressing the economic importance of this channel. (JEL D72, L51, L82, M31)

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Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 8 (2016)
Issue (Month): 1 (January)
Pages: 224-256

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Handle: RePEc:aea:aejapp:v:8:y:2016:i:1:p:224-56
Note: DOI: 10.1257/app.20150042
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